BERLIN, Sept 1 (Reuters) - Chancellor Angela Merkel's conservatives and her Social Democrat (SPD) coalition partners bled support to the far right in two state elections in eastern Germany on Sunday, dealing a double blow to her already unstable ruling alliance.
Merkel's Christian Democrats (CDU) remained the largest party in Saxony, but saw their share of the vote drop by 7.4 points from the last election in 2014 to 32%, with the far-right Alternative for Germany (AfD) coming second, an exit poll for broadcaster ARD showed.
The AfD harnessed voter anger over refugees and the planned closure of coal mines in the formerly communist eastern states, casting themselves as the heirs of the demonstrators who brought about the fall of the Berlin Wall three decades ago.
In Brandenburg, which surrounds Berlin, the left-leaning Social Democrats (SPD) clung on to first place in a state they have run since German reunification in 1990, winning 27.5% of the vote - ahead of the AfD on 22.5%.
The setbacks for the ruling parties were not as major as feared but could still hasten the break-up of the national coalition led by Merkel, who has loomed large on the European stage since 2005 and whose early departure would further unsettle a European Union already unnerved by Brexit.
(Writing by Paul Carrel Editing by Madeline Chambers)